**NICOSIA, Cyprus** – As the new year dawns, Cyprus finds itself grappling with significant economic disparities, starkly illustrated by divergent approaches to minimum wage adjustments in the Republic of Cyprus and the Turkish-occupied northern territories. While the government-controlled south has implemented a fixed minimum wage increase aimed at balancing worker support with economic competitiveness, the north has introduced a more modest hike coupled with a supplementary allowance, a move met with considerable dissatisfaction by labour unions.
In the opening weeks of 2026, authorities in the occupied areas announced a revised minimum wage, set at 60,618 Turkish lira for the initial six months of the year. This figure translates to approximately €1,237 before deductions and €1,076 net, a sum deemed insufficient by many workers and union representatives. The decision, ratified by a majority vote within a relevant committee after its third deliberation, was accompanied by the introduction of a supplementary allowance of 12,000 Turkish lira (€245). This allowance, intended to offer a degree of mitigation against prevailing economic pressures, will see half of its value disbursed in advance over a six-month period. Crucially, this benefit is earmarked for "citizens of the TRNC" whose social insurance contributions are calculated based on the minimum wage. The purported overall increase, factoring in this allowance, has been stated by officials to be 22.9%.
However, this adjustment has ignited a firestorm of criticism from labour organisations in the north. Ahmet Serdaroğlu, president of the Hür-İş trade union, decried the percentage increase as "a ridiculously low percentage," arguing that it fails to adequately address the escalating cost of living. Unions had been advocating for a more substantial rise, pushing for an 18.39% increment that would align more closely with the inflationary pressures experienced by ordinary citizens. The gap between the unions' demands and the authorities' decision has led to acrimonious exchanges between employers and government representatives in the occupied territories, with workers expressing palpable frustration and a sense of being left behind despite the nominal wage improvements.
Concurrently, in the government-controlled Republic of Cyprus, a more measured approach has been adopted. Just prior to the Christmas festivities, the cabinet sanctioned an increase to the national minimum wage. Effective from January 1, 2026, the minimum wage for full-time employees who have been with the same employer for at least six months has been fixed at €1,088 per month. For those in their initial six months of employment, the wage has been elevated from €900 to €979 monthly. This policy aims to strike a delicate equilibrium, providing a boost to low-paid workers while simultaneously safeguarding employment levels and maintaining the island's overall economic competitiveness on the international stage. The Republic of Cyprus has committed to maintaining these minimum wage levels for a period of two years.
The contrasting fiscal strategies underscore the complex economic landscape of Cyprus, a situation further complicated by the island's political division. While the north grapples with the immediate fallout of its wage adjustment, facing renewed union action and worker discontent, the south is focused on sustainable economic management. The long-term implications of these disparate policies for labour markets, social welfare, and overall economic development across the island remain a subject of intense scrutiny.